South Africa’s government, which holds the largest real estate portfolio in the country, lacks an accurate account of its properties or their usage, with efforts to audit the portfolio dragging on without success.
Official records list about 88,000 buildings and five million hectares of land, valued at an estimated 155 billion rand ($8.7 billion), according to Bloomberg.
However, Public Works and Infrastructure Minister Dean Macpherson expressed doubts about the accuracy of these valuations and whether all assets have been properly identified or documented.
“I am not happy with, and have very little confidence in, the asset-management register that has been presented to me because a lot of it does not make sense,” he told reporters in Cape Town on Wednesday. “One property is valued at 5 million rand when I know that should have a 200-million-rand valuation.”
The newly appointed minister, Dean Macpherson, who took office in June is grappling with addressing South Africa’s incomplete property records.
One possible solution being considered is creating a property management trading company, which would allow the government to use its real estate assets to help finance infrastructure development.
President Cyril Ramaphosa stressed South Africa’s significant infrastructure needs, stating in March that 4.8 trillion rand is needed by 2030 for transport, water, and other projects. Per a city council review, Johannesburg, Africa’s wealthiest city, requires 221 billion rand ($12 billion) to address its infrastructure crises.
The value of South Africa’s planned investment projects surged to an annualized 793.7 billion rand in the first half of this year, a significant rise from 193.2 billion rand in 2022, according to a recent report by Nedbank Group Ltd. Government entities and public corporations account for about 75% of these projects.
To fast-track these mega-infrastructure developments, a new government office called Infrastructure South Africa has been created. This office is designed to streamline bureaucracy and attract domestic and foreign investment.
